From the outside, the past few months have been one long winning streak for South Korean President Moon Jae-in. After presiding over the successful Winter Olympics, Moon made international headlines by holding a historic summit with his North Korean counterpart Kim Jong-un. He has deftly managed to balance loyalties to both South Korea’s main ally, the United States, and North Korea, helping to salvage the planned summit between Washington and Pyongyang just as it was looking like a lost cause.

But a close look at Moon’s domestic political landscape shows that all is not smiles and handshakes. Moon has staked his presidency on improving ties with the North. The strategy has paid off so far, winning him approval ratings higher than 70 per cent, and all the North Korea talk is distracting from domestic issues where he is proving less successful, such as a sluggish economy and a smouldering scandal involving a politician from Moon’s party.

Local elections are due on June 13. If the summit is a bust and Moon’s party takes a hit at the polls, the honeymoon of his first year in office could come to an abrupt halt.

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When running for president last year, Moon pledged to improve ties with North Korea, but a bigger part of his platform was to rein in inequality and create more stable jobs. A centrepiece of these plans was an increase in the minimum wage; a more than 16 per cent raise went into effect at the start of the year, and so far, reviews are mixed. A think tank report this week concluded the increase led to the loss of 84,000 jobs – rather than absorbing higher labour costs, employers are cutting staff.

“For South Koreans, economic reality is more important than some hope for future reunification. And the economy is not exactly going well for Moon,” said Michael Breen, a Seoul-based historian and author of The New Koreans: The Story of a Nation. “He is a skilled politician and he must know that even if the economy goes well, public opinion of his administration will sour eventually anyway. What voters need is a distraction and a protracted improvement of relations with North Korea might just be the ticket.”

Scandals are common in South Korea, and Moon is not immune. A special prosecutor is investigating a blogger with ties to a ruling party lawmaker suspected of using a computer program to manipulate online comments in Moon’s favour. While Moon is not thought to be directly involved, the scandal is an embarrassment for his government, which promised a break from the shady ruling style of its right-wing predecessors.

The scandal might be one factor energising Moon to pursue reconciliation with North Korea. “With the unfavourable situation in the National Assembly, President Moon has little option but to improve inter-Korean relations,” said Kim Sung-kyung, a professor at the University of North Korean Studies in Seoul.

Hang on, what language is Kim Jong-un speaking?

If the Trump-Kim summit doesn’t end with a breakthrough, he is likely to be able to keep the conciliatory momentum going forward as long as there is an agreement on “broad and relatively vague goals” of future denuclearisation, said Naoko Aoki, a research associate at the Centre for International and Security Studies in Maryland.

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But if things don’t go well in Singapore, if one side storms out of the meeting room and no agreement – even a vague one – is reached, Moon’s task of acting as a bridge between the two sides will become much more challenging, or worse, irrelevant.

“Moon came into office on a promise to create jobs. He has made almost no progress there, but hasn’t been criticised because the North Korea breakthrough has overshadowed everything. If the summit fails, then all the domestic issues facing Moon will come into much starker relief,” said Breen.